Double-Digit Growth in Card Programs at American Airlines Credit Union

The $5.3 billion American Airlines Credit Union reported that its relatively young credit card program has remained strong during the Great Recession.

The credit union was the last of the CUs of above $1 billion in assets to have launched a card program when it got under way in 2004.

According to Nancy Crouch, director of card services, the credit union has seen the card program grow by double digits throughout the recession in both the number of card accounts and the card account balances. The credit union's data reported to the NCUA indicated the card program ended March 2011 with a delinquency rate of 1.23%.

Crouch attributed the steady growth in part to the credit union's decision not to use promotional or introductory offers to market its cards. Instead, it focused on maintaining the lowest rates and as few fees as possible on the cards. She also credited a program at the CU which focused on making card marketing a central part of the CU's overall marketing structure.

"The product is also given a high level of priority and focus throughout our branch and lending channels," Crouch wrote in an email exchange about the program, adding, "Our credit card program is not an afterthought. This level of ownership is imperative to the success of any credit card program, in my opinion."

As of the end of March, the CU reported having just over 35,000 active card accounts that carried $111 million in balances.

The CU deploys three different card platforms, all Visa platinum. One offers a rewards card that carries a "beginner" option that allows people to build their credit histories without too much risk to the CU. The second card is a low-rate card that Crouch described as popular with members who are working to pay down existing debt. Finally, AACU offers a secured card that a member can secure with an interest bearing account that can be started with as little as $250 and carries the same interest rate on the CU's other share accounts. None of the cards have an annual fee, over-limit fees or balance transfer fees, Crouch reported.

Crouch said the decision to focus on offering the best deal on cards rather than introductory or promotional rates has helped support the credit union's brand with its members.

"We believe it is at least in part to the high level of confidence they have in us, as their credit union, to provide them the best product at the fairest price," Crouch said. "By avoiding promotional offers, we have eliminated our members’ need to constantly worry about promotional expiration and go to rates. We believe we have one of the most affordable and competitively priced credit cards they will find in the market," she added. "In our marketing and communication, we simply focus on the facts about the product. When you have a product as competitive as ours, in some ways, it sells itself.